Feel ripped off by Connells...

homer_j_3

I would like to see how it could be described as best advice to charge a customer for a survey when there is a free one in the offering from the mortgage company.

If the free one wasnt available due to property type or value then fair enough, the EA has provided a survey and has a right to charge.

It could also be that the product was a cheaper product for not having all the fees built in as sometimes this can be the case. I think until we are all furnished with further information, we are just second guessing.

AndrewSmith

The reason Connell's levvied this charge on you is that, as part of the Skipton Group, they have corperate dealings with some of the lenders which allows them to be on the Connells Panel of lenders.

One of the qualification criteria for a lender to be allowed on the Skipton Group panel is that the valution can be instructed immediately at adviser level, carried out by a 'Connells' valuer and must be acceptable to the lender as a valuation for mortgage purposes, without the lender having to carry out it's own valuation.

This is why the Product shown may have had free valuation but the adviser will have instructed one of their own surveyors immediately, charged you for it, and his office branch will have received a commission for doing so.

It will not be disclosed on and IDD as it is an 'option' available to you as opposed to a compulsary fee payable for the advice. The broker however should have made you plainly aware of what was going on.

In my mind, it is dangerous to instruct a valuation immediately at broker level, as the broker does not have mandate over the underwriting decision. In general a lender will only instruct valuation once it is satisfied that you fit their criteria based on the information provided.

If the valuation is paid for and instructed immediately, then the case is subsequently declined at initial underwriting prior to the point when a lender would have instructed valuation, you will lose the fee you paid to the broker.

I believe that it is never worth pushing for an early valuation. Better to allow the lenders to do their underwriting and instruct survey/valuation when they think it is pertinent to do so.

Andy

homer_j_3

AndrewSmith wrote:

The reason Connell's levvied this charge on you is that, as part of the Skipton Group, they have corperate dealings with some of the lenders which allows them to be on the Connells Panel of lenders.

One of the qualification criteria for a lender to be allowed on the Skipton Group panel is that the valution can be instructed immediately at adviser level, carried out by a 'Connells' valuer and must be acceptable to the lender as a valuation for mortgage purposes, without the lender having to carry out it's own valuation.

This is why the Product shown may have had free valuation but the adviser will have instructed one of their own surveyors immediately, charged you for it, and his office branch will have received a commission for doing so.

It will not be disclosed on and IDD as it is an 'option' available to you as opposed to a compulsary fee payable for the advice. The broker however should have made you plainly aware of what was going on.

In my mind, it is dangerous to instruct a valuation immediately at broker level, as the broker does not have mandate over the underwriting decision. In general a lender will only instruct valuation once it is satisfied that you fit their criteria based on the information provided.

If the valuation is paid for and instructed immediately, then the case is subsequently declined at initial underwriting prior to the point when a lender would have instructed valuation, you will lose the fee you paid to the broker.

I believe that it is never worth pushing for an early valuation. Better to allow the lenders to do their underwriting and instruct survey/valuation when they think it is pertinent to do so.

Andy

Can this be justified as suitable advice????

AndrewSmith

The main justification (not mine I hasten to add) for this is in the situation of a first time buyer, for example, who is trying to secure a property with other people interested.

Estate agencies always use valuation or survey as a benchmark for mortgage proceedings etc, thus in some cases the property is secured by the first person to successfully reach the point of the agent being contacted for access to survey.

This is false economy though as a valuation instructed at point of application doest not mean that the lender will agree to lend as no formal underwriting has taken place.

It is a facility that I, for example, have available however have never used.

It's the same as the whole credit check issue. I can carry out a credit check using my laptop and 3g interet connection whilst sat in a clients living room. However it will cost them £8.95 to do this. In some cases I agree that it is necessary however in most cases where access to the credit file is needed there are far cheaper ways of getting the infomation.

My advice to any potential buyer or mortgage customer is to stick with what is shown on a verified Key Features Information sheet (quote) including survey costs etc.

Andy

homer_j_3

I understand where you (or the theory) comes from and its poor in my eyes but I know you are not supporting it.

Just backs up what I think about the role of a mortgage adviser in an estate agency. Conflict of interests is not good.

MortgageMamma

I really feel sorry for the OP. This is bad news and a bad way of operating, the informaiton Andrew has brought to light only reinforces how vital it is to get the right advisor, with impeccable morals and a true sense of duty to their clients.

AndrewSmith

MortgageMamma wrote:

I really feel sorry for the OP. This is bad news and a bad way of operating, the informaiton Andrew has brought to light only reinforces how vital it is to get the right advisor, with impeccable morals and a true sense of duty to their clients.

The problem is MM that this particular organisation are in no way unique in the way they operate this type of system.

As for where does the ultimate blame lie? Who knows.

All the time that mortgage progress is measured on how fast a survey can be instructed, there will be pressure on the brokers to get this as soon as possible.

I do not blame estate agents however I feel that in some cases some need to be re-educated as to the complexity of some mortgage applications, and need to pass the basic understanding of this on to their vendors.

Just because it may take 10 days to get a valuation instructed does not mean that the mortgage will not go ahead, it simply means that the case requires more work than average.

It could be suggested that we are moving towards a very elitest society by operating such systems, whereby only the 'cleanest and easiest' mortgage applicants ever get ahead when up against other buyers due to the fact that a survey can confidently be instructed by the lender quickly.

It does however, raise again the point of obtaining an 'agreement in principle' before one begins the property search. There are firms of brokers who will not do this, however I feel it is absolutely vital. After all, if you don't know what the target is, how can you aim for it? let alone hit it?

Andy

secret_sam007

Hi thanks for all the pointers folks!

Ive done some checking and both were "basic surveys" (i.e. not the homebuyers report or structural survey),
so it does seem Im £450 out of pocket here after all....:mad:
(Otherwise its exactly the same product, fees, product-codes, mortgage bank, etc ,etc , etc).

Connells does apparenlty require their own surveys for loans they arrange, but what they dont tell you when it costs you money vs [in this case] exactly the same free service from the lender (Coventry Flexx in this case) you are borrowing from...charming!
I had'nt realised that banks would actually get you the loan organised before the survey though... (I had a morgage approval in principal done before this, and Im confident that part is ok)..

I probably wouldnt feel so iritated (not have even bothered to look into things!) by the whole process if Connells was'nt acting as a "speed-bump" in the road here...

They've told me I cannot contact the surveyor or the bank myself.
Lucklily Ive ignored them and contacted the bank directly to find out what was delaying things there, and it turned out they are still missing other important signed paperwork, but dont seem to be able to understand this message (either from me, or from bank!)
So another round of phone-calls to mortgage advisors and banks later and they have still not correctly understood the missing admin side....
(i.e. a fully signed application, signed direct-debit mandate & a that £450 house-servey again! lol ..and they still cant tell me when it will come in a week later...!). So still no idea when that part will be sorted out...
(and the bank tells me that it will take 2 weeks from time of the FULL application/etc to process the loan!).

Maybe I am being unreasonable here, but when I dealt with a bank directly in the past I had none of these problems - everything was totally upfront in terms of costs & any additional-charges/options, paperwork just happened smoothly and I had none of the hastles Im getting here...

Im sure there are some excellent mortgage advisors out there, but dealing with a Connells call-centre (who is just calling other call-centres Im sure!) seems to be like a game of Chinese wispers here...

It would be nice if my mortgage advisor was actually responsive...but I guess I should'nt expect that post-sales care..!? Oh-well...! (Still if my commission relied on getting a loan completed, Id sure care abit more about making the process easier for customers..or do they pay them on sign-up!?)

In short Id say AVOID Connells - While I think the advice they give is actually pretty/very good (I had assumed they used all lenders - they'd spoken of 15,000 products, but someone on here indicated they dont...?)
their customer-service and admin for the mortgage process itself post-sale is pretty abysmal & disorganised in my experience here...

Note: The loan was for ~ £322k on a £358 house with a deposit of vs £30k i.e. (within aprox 3.5 times earnings, and with additional assets of £200k - in the form of the house I am in the process of selling currently...in hindsight probably a mistake to setup like this, although I got the exact same interest loan deal, no early repayment penalties (of course!) and would have lost the house Im buying, as I didnt even have my house on the market at that point!!)

many thanks again folks!
Sam

PS Any advice on how to address the £450 charge with Connells, I admire good/ethical behaviour in companies (indeed Ive written in praise-letters when Ive seen great customer service!), but I take poor/wrong customer service equally seriously...their complaints procedure, FSA or Small-Claims tribunal? (or is this a complete waste of time...?)

PPS Can someone explain about the role of the mortage advisor here in terms of conflict of interest..? I thought they were totally seperate from the mortgage company itself (Im not getting the house through them, I got that from another agent actually!).

PPPS One a side-note, it was interesting that Mortgage advisors in this currently pretty fully valued market are still activly selling BTL mortgages, without underscoring the risks as well as the upsides.
(same story from real-estate agents, of course...)

One excelent tool I downloaded for this purpose was from here:-
https://www.let-a-property.info
For £20 it was an excellent calcultor to help do a real-world sanity check of BTL...! (no plug, Im sure people can point to similar free tools!)

AndrewSmith

Connells does apparenlty require their own surveys for loans they arrange, but what they dont tell you when it costs you money vs [in this case] exactly the same free service from the lender (Coventry Flexx in this case) you are borrowing from...charming!
I had'nt realised that banks would actually get you the loan organised before the survey though... (I had a morgage approval in principal done before this, and Im confident that part is ok

Trust me this is absolutely not the case. I know the Skipton Group proceedures very well and this is what you would have been told by the adviser, however let's see what the FSA would have to say about it.

You DO NOT have to use their survey, in the same way that you DO NOT have to use their adviser.

Contact their HQ in Leighton Buzzard and kick up a right stink about it. Give the name of the adviser and demand to speak with the local FInancial Services Director for your area.

Tell them that you were given no choice and told you HAVE to use their surveyor which has left you £450 out of pocket on a product that offered a free valuation anyway.

Tell them you want the complaint escalated through their own FSA approved complaints proceedure and you expect a FULL refund of the £450.

If you need any help with this then come back here, and let us know what the outcome is. Whatever you do dont let this go!!!

Andy

MortgageMamma

I completely agree with your comments Andrew, I for one, ALWAYS get an AIP for every single case I deal with. It puts the clients mind at rest, and my mind also, as I know the case is then likely to be accepted by the lender.

I had one case in Feb, BTL, where the vendor would accept the offer of the person who instructed a valuation on the property first. There were six people in total wanting to buy. I called the estate agent concerned and complained, giving them a tongue lashing for put my client in a situation whereby she could lose money. My client went ahead anyway and I applied to BM solutions online for her, only for her to receive a call from the estate agents two hours later to say the property had been removed from the market. I was distgusted with the way it was done (and the EA was told this also), Luckily BM solutions were very good about this and refunded the charges.

She's since done 3 BTL mortgages with me and never had the same problem.